Will Airbnb impact traditional meeting room blocks?

Sunday, January 19th, 2014 by Adrian Segar

Brian Chesky, 32, is the founder and CEO of Airbnb, “a community marketplace for people to list, discover, and book unique accommodations around the world” that was founded in 2008 and, in just six years is expected to become the world’s largest hotelier.

Perhaps the most informative answer to this question to date comes from a study published in December 2013: The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry by G Zervas, D Proserpio, and J Byers, at the Boston University School of Management <pdf, free download>. The research looked at data collected from Texas hotels between 2008 and 2013 and found that:

Every 1 percent increase in the number of Airbnb bookings led to a .05 percent decrease in hotel revenue;

The impact of Airbnb falls disproportionately on hotels with little or no conference space; and

Luxury and upscale hotels in Texas were not significantly impacted by the arrival of Airbnb.

At first sight, this doesn’t look too bad for the meetings industry, unless you’re booking room blocks in midprice or value hotels. But I think there are some factors that this excellent study of the past doesn’t include when we attempt to predict the future.

Airbnb is still relatively unknown and is growing incredibly quickly Airbnb’s growth is commonly described as “hockey-stick” (think Al Gore’s An Inconvenient Truth). Check out the company’s online interactive annual report for details. Airbnb had booked 5 million cumulative nights by February 2012; by June, it had doubled that to 10 million. A year ago I knew nothing about Airbnb and never considered staying anywhere but a hotel or traditional B&B when I traveled. Having trouble finding conventional accommodation for a trip that met my needs, I joined Airbnb in September 2013, along with 5 million other people that year. Since then I have already used the service four times. What happens as we pass the early adopter stage and move into a world where it’s easy and normal to stay in/rent out residential accommodations for short periods?

Might meeting attendees start sharing Airbnb accommodations? I just returned from PCMA Convening Leaders in Boston. I have a local apartment, so I commuted and didn’t stay in the room block but the conference offered block rooms from $175 – $209 per night single/double occupancy. A quick browse of Airbnb turned up several small attractive two-bedroom apartments within a few blocks at $170 per night (for two occupants, $150 for one) with kitchen, internet, and a washer & dryer. While there’s no way that Airbnb can currently match the quantity of hotel rooms available around the Hynes Convention Center, the offerings I found were extremely competitive on price alone, and included amenities that are not available for free or at all in most hotels. And given that two employees could stay in separate bedrooms in one of these Airbnb properties, the cost savings become even more attractive.

Airbnb offers rooming options that are often not available via traditional accommodations The four Airbnb reservations I’ve made since joining the service have all been in San Francisco. My younger daughter lives within a few blocks of Golden Gate Park, and there are only two bed and breakfasts (and no hotels) in her area. Both B&B’s were booked when we wanted to be there, but an Airbnb search turned up many options for staying close to her apartment. Since we didn’t want to share a home with others we searched Airbnb for self-contained apartments and found two nearby that matched our requirements. If room blocks sell out I believe that the variety of Airbnb choices close to a meeting venue provide an attractive backup. And if room prices are seen as too high, Airbnb makes it easy to search for nearby cost-effective alternatives.

Airbnb makes it easy to look for just what you need I have a personal story here. Last month, my younger daughter was crossing the street at a crosswalk in San Francisco when she was hit by a car, breaking both her legs. (Luckily she suffered no other injuries and should eventually be fine.) After surgery and rehab she could not return to her apartment right away, as it is, like many San Francisco accommodations, only accessible via a steep flight of steps. We faced an immediate problem of finding her somewhere to stay that was handicap accessible in central San Francisco, close to friends that could assist her, for about six weeks until she could weight-bear and get around on crutches.

Short-term rental agents were unable or unwilling to return our calls. Hotels had a few handicap accessible rooms but provided nowhere for her to cook any meals. Craigslist, besides being a potential source of sketchy room listings, presented us with the daunting prospect of calling every potential lister to find out whether the accommodation was accessible.

Airbnb allowed us to quickly search for handicap accessible accommodations for our daughter. Based on the detailed listings and customer reviews we were able to pick several possibilities and send messages to the owners asking about access, door widths, etc. As a result we were able to find two three-week rentals that fit our unusual criteria. Without Airbnb I’m not sure what we would have done.

Quirkiness can be compelling Yes, there are many meeting attendees who want the predictability of a bland hotel room. But the boutique hotel sector is one of the fastest growing, an indication, perhaps that quirky Airbnb accommodations are an attractive alternative for an increasing number of business travelers who enjoy something a little different from the average cookie-cutter places to stay. Airbnb, which offers everything from a couch in a room in someone’s home to modernist architecture, green buildings, and castles has something for everyone.

Conclusion Clearly I’m a fan of Airbnb. Signing up for the service was reassuringly thorough; the verification process required social media logins—either Facebook or LinkedIn—plus offline proof of ID, a driver’s license or passport (digital scanning included in the Airbnb app) and took about 30 minutes. (If you’re still concerned about staying at a listed property, you can choose those that have enough satisfied user reviews to reassure you.)

As meeting designer who is occasionally given responsibility for attendee accommodations, I fully understand the reasons for room blocks and will continue to use them myself whenever possible. The question remains whether more meeting attendees will, like me, join the Airbnb bandwagon and add it to their list of alternatives to the room block. Only time will tell, but my gut feeling is that over the next five to ten years Airbnb will noticeably reduce the demand for in block housing, creating a significant impact on how we’ll need to plan our meeting accommodations.

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